Film Marketing: results and consequences of an inflationary trend

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Film Marketing :
Results and Consequences of an Inflationary Trend
Hélène Laurichesse
Professeur Associé
Université Toulouse 2 Le Mirail
École Supérieure d’Audiovisuel
Laboratoire de Recherche en Audiovisuel
5, Allées Antonio M achado
31 058 Toulouse Cedex
tél : 05 61 50 44 46
Fax : 05 61 50 49 34
e-mail : [email protected]
S téphane Magne
Maître de Conférences
Université des S ciences S ociales — Toulouse 1
Institut d’Administration des Entreprises de Toulouse
Centre de Recherche en Gestion
Place Anatole France
31042 Toulouse
tél. 05 61 63 56 00
fax. 05 61 63 56 56
e-mail professionnel: [email protected]
e-mail personnel : [email protected]
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M
arketing applied to the movie industry has often been diabolised for ideological
reasons. Nowadays, we observe an excessive inflation of its utilization. In a period
of increase of movie release combined with a reduction of the period of their life
time in theatre, there is an inflation of copies, production budgets and release costs. This
situation is problematic for the distributors’financial health who are in charge of the
marketing. It increases the difference between small and big distributing companies.
But this higher bid of marketing doesn’t go along with a rigorous application of its
techniques. Even if the homemade is moving toward a more professional use of marketing
1
applied to the movies, the uses are more based on intuition than science . Strategic choices
(such as segmentation and positioning) are still part of this logic. For instance, the use of
screen tests aimed to determine a public is restrictive. M oreover, not knowing the impact of
marketing investments is a handicap to a better use of these expenses. This is particularly
what we want to analyze in the present document. We want to study the effects of some of
these expenses on performance indicators such as box office or gross.
The first part of this study will lead us to a presentation of the movie marketing concepts and
presents the issue of the actual evolution. We will particularly study why marketing plays
such a part in film industry today. The second part will present a statistical study on nearly
700 French movies: its goals, methods, results and prospects.
1. WHA T KIND OF MARKETING FOR THE FILM INDUSTRY ?
There are as many definitions of movie marketing as prospects of application in this domain.
However, the studies exploring this area tend to indicate that he is only a film marketing.
So, it seams important to situate the context of our study in the following figure.
Figure 1 : Market Levels in the Cinema Business
Marketing
Cinema
Marketing
Cinema
Theatres :
Marketing of
services
Film
Marketing
Cinema as a
leisure activity :
Cultural
Marketing
Spectateurs :
Cultural
Marketing
Professionals :
Relational
Marketing
The marketing applied to the cinema can be divided into two main orientations with several
sub-dimensions.
The movie theatres and entertainment levels corresponds to the global dimension of the
cinema market (cinema marketing).
The public and professionals (distributors, exhibitors, televisions, video distributors) levels is
more concerned with the supply dimension for each film (film marketing).
1
LAURICHESSE H., Marketing cinématographique et Attitudes des spectateurs envers la promotion des films à la télévision, Doctorat en
Sciences de l’Information et de la Communication, Université de Toulouse Le Mirail, Samedi 12 Décembre l998.
3
This distinction enables us to specify one fundamental difference in the expectations in
2
terms of marketing, notably contrasting « supply marketing » with « demand marketing».
Supply marketing (a concept born from the studies in cultural marketing), fits into the scheme
of a mediation between supply and demand in order to enable a film to meet its audience. It is
thus a way to support the artist in his will to meet the audience trying to identify his public of
an already elaborate film.
M arketing of movie theatres can conversely be directly inspired by marketing of services
since it is really the film/theatre duo that makes possible a meeting between the artist’s work
and the audience. Once you have distinguish the basic supply (the film, the screen, the seats)
from the peripheral supply (all the other services), the adaptation of the supply to the demand
will have an effect on the peripheral supply. The peripheral supply can be divided into
integrated supply (sell with the ticket) and modular supply (optional services). The role of the
marketing is then to create the value.
M ore precisely, film marketing as supply marketing is to fit into the scheme of
communication through the launch campaign. People are encouraged to see the film in
theatres. National and international television and editor video are encouraged to buy the film,
and all the press to talk about it. As we cannot take into account the following variables:
products, prices, distribution, the communication variable becomes central, not to say unique.
Then, there are some nuances with practices such as concept test, casting test or previews
destined to link the film industry supply with the audience expectations. But, in fact, theses
practices, first, are not systematic, and second are supposed to enable the creation of a media
plan (on serious bases on the identification of a target audience). In France, the protection of
authors’ rights requires the director’s permission for possible changes of work. When the film
maker accepts these conditions, he wants to put into light the problems of comprehension in
his film, or inadequate reactions (for example, laughters at the wrong moment).
Without trying to deny or minimize these practices, one can admit that the product/supply
variable is not really an active variable as element of the mix.
The other specificity of film marketing refers to its unique nature : film marketing is a
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launching marketing . Each new film being a new, and short, adventure, and can be
regarded as a new product. Audience satisfaction will not necessarily lead to a renewed
attendance (it rarely happens) and the audience loyality may be caused by the presence of an
actor or director, or film genre. There are many criteria, not easily usable, for a campaign,
probably because of the mode of influence is linked to individual personalities and behaviour.
The marketing of cinema as a leisure activity is also part of this prospect of supply
marketing with a method based on the audience knowledge, the communication and the
prices.
The knowledge of the audience has been analysed trough annual studies and surveys led by
The Centre National de la Cinématographie (CNC).
To stimulate the attendance of movie theatres, the State or a group of professionals
(producers, distributors, exhibitors) starts a national advertising campaign for the public, or
organizes special days with reduced fares : Printemps du Cinéma (Springtime Cinema
Festival), la Fête du Cinéma (Cinema Day), Cinestival ..
2
HIRSCHMAN E. C. , Aesthetics, Ideologies and the Limits of Marketing Concept, Journal of Marketing, 47, Summer, pp 45-55, 1983
HIRSCHMAN E. C. et HOLBROOK Morris B, Hedonic Consumption, Emerging Concepts, Methods and Propositions, Journal of
Marketing, 42, Summer, pp 92-101,1982
HOLBROOK M. B., Some Preliminary Research in Consumer Esthetics, Advances in Consumer Research, pp 104-108,1 980
HOLBROOK M. B. et Hirschman E. C., The Experiental Aspects of Consumption : Consumer Fantasies, Feelings and Fun, Journal of
Consumer Research, 9, Septembre, pp 132-140, 1982
KELLY R. F., Culture as commodity : the marketing of cultural objets and cultural experiences, Advances in consumer research, Vol. IV,
The University of British Columbia, 1987
COLBERT F., Le marketing des arts et de la culture, Editions Gaëtan Morin, Québec, Canada, 1993
EVRARD Y., Le management des activités artistiques et culturelles, Economica, 1993
DURAND J-P, Le marketing des activités et des entreprises culturelles, Juris Services, 1991
3
FINN A. et alii , Le développement de nouveaux produits dans les industries culturelles, Recherche et Applications en Marketing, 10, 4, pp
47-63, 1995
4
4
Film marketing destined to professionals is relational marketing . It starts right as the
beginning of the project through the search for money, led by producers notably, with the
competition of other projects on the market at the same moment. How to « sell » the film is
the responsibility of the author, then the producer and distributor. In fact, if this marketing
method is seldom seen like this, it is part of one of the heavy trends of the evolution of
marketing, notably for services and cultural activities 5 . .
The marketing of movie theatres6, conversely relies on a classic method with an analysis of
the internal situation (assets and handicap) and environmental (competition), traditional
strategy in terms of segmentation and positioning and mixed-marketing composed of four
main variables: products/services, prices, staff, communication.
Among these different levels of application, our study deals with the level of film marketing
destined to the audience. We will thus envisage its various components through its evolution
in order to question the consequences of the current trend.
2. THE INCREASING ROLE OF MARKETING IN FILM DISTRIBUTION
The development of marketing in film industry has several, interdependent reasons. The
increase of movies distributed in France, with the increasing number of film copy, lead to the
theatre saturation that even the development of multiplexes is not enough to balance. This
situation is also stressed by a bad distribution of the film releases throughout the year.
Thus, the duration of a film exploitation in theatres are more and more reduced with a system
of depreciation during the first days of a film release. This system has one main goal : leading
the audience to see the film in the days after the film opening. The advertisement around the
film then starts to be intensified with higher marketing investments. Let us analyse the
number of film releases of this evolution on each of the components.
The increase in the number of film releases
The increase in the number of films distributed is essentially due to a strong increase in films
made in France.
Table 1 : The Increase in the Number of Film Releases
French Movies
1991 140
1992 167
1993 154
1994 145
1995 147
1996 150
1997 151
1998 173
1999 209
2000 208
2001 204
Source CNC bilan 2001
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US Movies
158
121
135
146
139
140
145
159
179
194
162
Other
Movies
140
113
107
116
111
96
98
116
137
142
140
Total
438
401
396
407
397
386
394
448
525
544
506
LAURICHESSE H., Quel marketing pour le secteur cinématographique ? Cibles, finalités, et variables d’action, Actes du Colloque « Le
Marketing du Cinéma » , LARA, Maison de la Recherche, Université Toulouse II le Mirail, 27 et 28 Janvier 2000.
5
FLAMBARD-RUAUD S. et LLOSA S., Marketing relationnel et marketing des services : une profonde complicité pp.335-349 in PRAS
Bernard, Faire de la recherche en marketing , Vuibert FNEGE, Mai 1999, Cahors.
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LAURICHESSE H., Quel marketing pour le secteur cinématographique ? Cibles, finalités, et variables d’action, Actes du Colloque « Le
Marketing du Cinéma » , LARA, Maison de la Recherche, Université Toulouse II le Mirail, 27 et 28 Janvier 2000.
5
506 films have been distributed in 2001, the exhibitors get 10 new films each week, with
sometimes until 20 films each Wednesday (because the film releases are not well distributed
throughout the year). The incentive measures taken by the CNC are not enough to convince
the distributors to choose days of releases during summer holidays whereas the period from
September to December corresponds to maximal saturation in theatres.
In these conditions, it obviously appears that the film longevity in theatres is more and more
reduced : when a movie does not bring enough benefits during the first weekend, it will be
inevitably replaced by another movie the following weekend.
The increase in edition costs
The edition costs or marketing costs cover 3 main dimensions:
-
The film copies: manufacturing, transport, maintenance, stocking ;
the advertising costs: posters campaigns, trailers, media plan ;
the promotional costs : press attaches, press books, press lectures, press pics, making of,
events (partnership, merchandising), regional tours, avant-premieres, festivals…
68 % of these costs are usually dedicated to advertisement and promotional costs (32 % being
dedicated to film copies). Nevertheless, this percentage is even more important when the films
get 20 copies. one can note a true inflation concerning the copy manufacturing and the
advertisements. The other costs remain stable..
The increase in the number of film copies
Between 1999 et 2002, the amount of film releases has not really changed : 525 in 99 , 544 in
2000, 506 in 2001. But the amount of film copies increased by 35 % in 4 years. In the same
period, the number of screens has only increased by 5 % (+ 257 screens). The development of
multiplexes shall not explain everything. This technique leads to many records, but it has one
major handicap: the increase in film release costs could weaken independent distributors.
When one knows the very cost of one film copy (between 915 and 2289 €), one realizes the
consequences of such an evolution. M any movies are released today with 500, 600 or 700
copies, up to max.1000 copies for Harry Potter. The usual release of an average budget film is
now around 300 copies.
Beyond the changes of multiplexes, there are other causes explaining this inflation :
-
an increased number of original versions in the student cities (including blockbusters);
the use of a multi-programmation ;
a system of catalogues for distributors enabling them to get massive releases in different
types (because of the vertical concentration of the distribution sector).
Cause or consequence ? In this industry, the lifespan of films is shorter and shorter, the
increase in the number of copy (in a logic of field domination), goes with the necessity to to
secure a return on the film costs during the first days of release.
The increase in publicity and promotional costs
Between 1992 and 2000, the investments in film advertisements has been multiplied by five.
This increase in investments goes with the number of movie releases (326 in 92 for 640 in
2000) and the number of film copies. But the film release costs have been multiplied by two
6
and the ad investments by five. A study of the CNC shows an increase in ad investments of
7
more than 50 % between 1995 and 1999 .
In the U.S. an average ad investment corresponds to half the film budget (representing
sometimes more than the film production budget) whereas in France it represents 6 to 10 % of
this budget : there is still room for progress.
Currently, the budgets for launching a film in France range from 15 000 € to 3 M € whereas
the budgets for launching a blockbuster in the US range from 20 et 70 M $. The average film
production costs are to be included in 4,4 M € for France (50M $ for the USA) and marketing
costs usually in 0,27 M € (25 M$ for the US).
The media plan is divided into four main fields (in the absence of authorized advertisements
for films on television):
- the theatres (trailers)
- the radio
- the posters campaigns
- written press
Table 2 : Investments distribution between media
(percentage 1999)
Posters
Cinema
Press
Radio
TV
44,4
4
24,5
26,9
0,2
Source CNC info n° 279 2001
The poster campaigns in France today remain the most popular medium among the
distributors. Besides, this situation is specific to France. 0,27 M € are dedicated to
advertisements and nearly 45 % to poster campaigns. This is due to a very good poster
network and the opportunity of reaching geographically speaking a wide audience (it is
usually the role of television in the other countries). The following media are the radio and
written press, and the theatres.
The authorization of advertising films on television (which may be possible someday in the
context of European standardization) will be difficult for some distributors because of a new
inflation of ad costs. Until then, the French distributors have a free access to television
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through programs in which the film releases are tackled with publi-reports .
For several years now, it has been possible to advertise for films on the Internet, notably with
the creation of a web site specifically dedicated to the film, but this medium is not yet listed
by the CNC and it represents for the moment a marginal part of the marketing costs (1 to 2 %
of the marketing budget).
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CNC info n°279 Avril 2001
LAURICHESSE H., Marketing cinématographique et Attitudes des spectateurs envers la promotion des films à la télévision » , Doctorat en
Sciences de l’Information et de la Communication, Université de Toulouse Le Mirail, Samedi 12 Décembre l998.
LAURICHESSE H., Marketing du film : Promotion des films à la télévision et réponse des spectateurs» , Actes des 4ème Journée de
Recherche en Marketing CREGO IAE Dijon, Université de Bourgogne, 25 Novembre 1999.
LAURICHESSE H., Elaboration de sens du film à partir de la communication marketing » Entrelacs n°4 « Sens et Désaveux de Sens» , Mars
2002.
LAURICHESSE H., Marketing du film : La promotion des films à la télévision : Conception et Réception, Centre National de la
Cinématographie, Service des études et statistiques, Novembre 99.
LAURICHESSE H., La stratégie de communication marketing à la télévision pour le lancement des films cinématographiques : conception
et réception, Stratégies et Communications n°37, 1er trimestre 2000.
8
7
What trend for expense inflation and film profitability ?
The escalation of marketing puts forward the question of investment profits.
As the box office gross seems to increase as well as the escalation of marketing costs, what is
exactly the profitability of films ?
The annual survey made by Le Film Français M agazine shows that the most successful films
are often outsiders, like in 2002 the documentary directed by Nicolas Philibert called « Être et
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Avoir » (“To be and to have”) . As it is indicated on the board below, this film broke the
records with 446,23% amortization (documentaries being far less expensive than fiction
films).
Table 3 : Record of amortization in theatres
Films
2002
1 Etre et avoir
2 L’auberge Espagnole
3 8 femmes
4 Wesh Wesh …
5 Astérix et Obélix mission Cléopâtre
2001
1 Le fabuleux destin d’Amélie Poulain
2 La vérité si je mens 2
3 Une hirondelle …
4 Sous le sable
5 Le placard
2000
1 Taxi 2
2 Harry, un ami…
3 Le goût des autres
4 Jet Set
5 Promenons nous …
1999
Le ciel, les oiseaux et …
2 Himalaya, l’enfance …
3 Vénus Beauté
4 Les enfants du marais
5 M a petite entreprise
Budget ( M€)
Box office
Amorizationt %
1,04
5,33
8,46
0,23
49,8
1 627 534
2 951 212
3 710 104
67 522
14 559 509
446,23
156,35
129, 81
86,9
86,54
11,7
12,6
3,8
1,7
14,5
8 3339 829
7 867 157
2 316 845
682 777
5 316 614
216,00
189,90
182,90
120, 20
111,20
10,7
2,9
8,9
5,6
2,9
10 345 901
1 851 301
3 761 628
1 897 594
749 699
292,60
192,90
126,20
101,50
78,10
9,8
29
18,7
60,6
24,7
1 224 246
1 849 871
1 001 569
2 116 920
842 921
247,30
126,30
106
69,10
67,60
Source Le Film Français 7 Mars 2003
M ovies with 25% amortization (only 25 French films in 2002 for a total of 200 films) get an
acceptable profitability (meaning enough profit to secure a return on the costs). M ovies with
100% depreciation (only 3 films in 2002) get a real profitability.
Now, the balance between the money made in theatres and the film costs does not indicate all
the profits (made with DVDs, videos, TV broadcasts and international gross), but it remains a
strong indicator of the financial stability of one film.
One can note that there is a alternative to the inflation strategy : "To be and to have" has made
almost as much money as « Astérix et Obélix mission Cléopâtre” despite being 50 times less
expensive. Too often, the communication on production budgets and exceptional marketing
costs tend to make us think of a secured success. Yet, the exact profits due to marketing
operations remain too difficult to be measured, and the titanic budgets do not a guarantee
success in terms of profitability.
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Except 2001 with Amélie and Would I lie ? 2
.
8
As far as film marketing is concerned, the distributors do not make surveys to measure the
impact of marketing: each film is a unique case and it seems difficult to spend money just for
this sort of study. When the film is a success, all the beneficiaries are satisfied and nobody
would ask any question. When the film is not a success, the beneficiaries are put into a
difficult financial situation and cannot make any more expense that they would see as
unuseful (since the next film is to be a new and different adventure).
The inflation strategy accentuates an imbalance between independent groups and
multinational groups. Today, these questions are more significant than ever.
On a more global level, the studies made at university are rare and usually tackle a few
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components of marketing ,the influence of promotional television on the audience, the
importance of film opening grosses on the final results, or the origins of the audience
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choices .
That is why we have tried to measure and explore the links between these questions.
3. THE STATISTICAL DATA ANALYSIS TO MEASURE THE IMPACT OF
PROMOTIONAL MOVIES BUDGETS
The analysed data concern French pictures listed by the service of studies and statistics of the
French National Centre of Cinematography (CNC). The studied period extends from 1998 till
2001 with a total of 690 films to be studied.
690 studied French films
Table 4: French distribution of pictures from 1998 till 2001
Year
1998
1999
2000
2001
Missing
Number of mov ies
142
170
173
204
1
690
%
20,57
24,63
25,10
29,56
0,14
100
The collected data over this period allow a longitudinal approach on promotional budgets.
This approach will consist in measuring the effects of certain variables of production,
distribution and mix-communication on some indicators of movies "performance". The
analysed data are so qualitative as quantitative. For each picture, we have:
10
KRUPICKA A., Importance du moment d’entrée des films, 6ème Journée de Recherche en Marketing CREGO IAE Dijon, Université de
Bourgogne, 2001
LAURICHESSE H., Marketing cinématographique et Attitudes des spectateurs envers la promotion des films à la télévision, Doctorat en
Sciences de l’Information et de la Communication, Université de Toulouse Le Mirail, Samedi 12 Décembre l998.
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KRUGER A, Traitement de l’information et décision de choix d’un film : Influence des caractéristiques individuelles et de la
consommation inter-personnelle, Thèse de doctorat , Sciences de Gestion, Dijon, 1997
EUZEBY F., La bande annonce dans le choix des films, 6ème Journée de Recherche en Marketing CREGO IAE Dijon, Université de
Bourgogne, 2001
MARTIN E , Recherche Marketing et cinéma, Université Clermont 1, Thèse d’état , Faculté des Sciences Economique et de gestion, 1989.
AUSTIN B.A., Film Attendance : Why college students Chose to see their most recent film, Journal of Popular Film and Television, Vol 9,
PP 43-49, 1981
ELISABERG J et SHUNGAN S.M., « Film Critics, Influencers or Predictors ? » , Journal of Marketing, 61,2, 68-78, 1987
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At the production level:
The production budget
At the distribution level:
The number of copies (national and on Paris / Suburb)
The distribution company
At the mix-communication level
The detailed promotional budgets: national and regional poster campaigns, radio,
national press and regional press, cinema, satellite / cable TV and regional TV
The total communication budget
The financial movies results:
Number of entrances
Receipts
Data were completed thanks to professional magazines such as Le Film Français and Écran
Total… They allow us to describe and to explain the relationship between these various
variables in order to estimate the effects of the involved marketing investments and draw the
consequences at the strategic and operational plan.
The methodological choices: the use of multivariate methods of data analysis
The methodological options rely on the use of multivariate methods of data analysis.
¬ Descriptive level: the multidimensional methods allow us to investigate and to sum up the
set of statistical data. Factor analysis will summarize the data and will describe the studied
phenomena.
­ Explanatory level: multiple regressions should allow us to explain the effects of the cinema
marketing on the “success” of movies and more precisely on entrances and receipts.
These data analyses will be done with SPSS (Statistical Package for Social Sciences)
software.
Numerous disparities between movies
Univariate analyses show strong disparities on all the movies as show the following tables.
Table 5: Averages and standard deviation
Valid
movies
Missing
data
Average
Standard
dev iation
Minimum
Maximum
Production
National Régional
Budget
(M€)
Press
Press
National
Copies
Paris /
Suburb
Copies
137
207
570
662
588
690
690
553
483
120
28
102
0
0
229
15
439490
13492652
4673079
327
74
180
14
1179900
39881203
5675891
590
255
15
1
5162
1524
114002
0
0
827
56
10239017
369069696
75209160
7720
2826
Film
Entrances Receipts
10
Table 5(bis): average and standard deviation
Total
National Regional Cable/Satellite TV Promotional
Radio Cinema Poster Poster
or Regional TV
Budget
Mov ies
Average
Standard
dev iation
Minimum
Maximum
690
690
690
690
690
690
273
132
383
157
6
1352
589
367
1169
471
78
2428
0
0
0
0
0
1
7502
2956
10016
4498
1669
21190
Globally, the gap between movies is very important on all the collected elements in this study.
The number of copies, the number of entrances, the production and communication budgets
show strong contrasts. The averaged promotional budgets are the following one: (a) Posters:
540; (b) Press: 401; (c) Radio: 273; (d) Cinema: 132; (e) TV: 6.
When we analyse the whole data set, we can look for the tendencies which structure these
tables of data for the 690 studied movies.
The Factor Analysis results:
Link between movies receipts and communication investments
Factor Analysis is a multivariate method of data analysis. It means that you can
simultaneously treat more than two variables. Factor Analysis is going to reduce the data
appearing in the data file. It is going to aggregate these data in some synthetic axes called
factors. Each factor can be regarded as a combination of similar variables. They restore the
"tendencies" of the 690 movies data by synthesizing and by keeping only the significant data.
Figure 2: Principles of the factor analysis method
Groups of
movies
Factor 2
Factor 1
Initial Data from CNC
Factors
(called axes or components)
The Factor Analysis is going to include all the data excepted those concerning the number of
copies because of too many missing data: it would not permit to reveal the structure which
concern the 690 movies. Besides, the budgets were grouped according to the five traditional
media without taking into account differences between national and regional budgets. What
are the links which unite the initial variables ?
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Table 6: correlations matrix
Entrances
Entrances
Production
Budget (M€)
Receipts
Total
Promotional
Budget
Cinema
Radio
Posters
Press
1
Receipts
0,999
1
Production Budget (M€)
0,55
0,56
1
Cinema
0,2
0,21
0,2
1
Total Promotional Budget
0,54
0,54
0,52
0,49
1
Radio
0,41
0,42
0,42
0,29
0,82
1
Posters
0,48
0,49
0,48
0,33
0,9
0,63
1
Press
0,45
0,46
0,4
0,29
0,75
0,6
0,47
The picture receipts, for example, are correlated 12 at 0.56 to the production budget and at 0.54
to the global promotional budget. This first statistical element reveals the link between the
promotional budgets and the number of entrances (and consequently receipts).
Finally, two main components can be extracted. A xes can be regarded as linear combinations
of initial correlated variables.
Financial pictures performance and communication investments
The following table indicates the correlations between variables and found factors. Using a
13
Varimax rotation , the results display two factors. How to interpret these axes thanks to the
variables which are the most strongly correlated to them?
Table 7: the factors
Total
promotional
budget
Radio
Posters
Press
Cinema
Entrances
Receipts
Production
Budget (M€)
Axe 1
Axe 2
,911
,383
,788
,756
,675
,628
,286
,376
,360
-1,728E-02
,192
,201
,328
,951
,949
,658
Variance
38,22 %
34,24 %
(Component Matrix after Varimax rotation and without TV variable)
The total information restored by these 2 axes is 72,46 %. It means that the information
contained in the initial table of data (matrix in 690 lines-movies and in 11 columns-variables)
has just been summarized by only 2 axes. The first axis restores 38,22 % and the second one
34,24 %.
12
The coefficient of correlation measures the link between two metric variables. It ranges from -1 (negative correlation: variables vary in
opposite sense) to +1 (positive correlation: variables vary in the same sense). A weak correlation is close to 0. A strong correlation is close
to 1 in absolute value.
13
The TV variable was removed because of the weak assigned budgets. Its contribution is relatively unimportant due to the French
constraint concerning cinema advertisement.
1
12
Figure 3 - The factors
Factors Interpretation
B udget communicat ion
t otal
Axis 2 :
Performance / profitability
1
Radio
0,5
A ffichage
P ress e
0
-1
0
1
Cinéma
-0,5
Nombre d'ent rées
-1
Recet tes du film
Axis 1 :
Co mmun ication Inve stmen ts
B udget de product ion
(M€)
The first axis seems to be an axis of "picture performance" (entrances, receipts and
production budget) or an axis of the movie profitability? The second factor consists of
detailed communication budgets (radio, posters, press, cinema, cable/regional TV) including
the total promotional budget. It is apparently an axis representing the "communication
investments". The interest of this type of analysis also is to show the pictures on the chart so
as to track down the position of the 690 French movies with regard to these axes.
Figure 4 - Position of the significant movies
ASTER IX ET OB EL IX C ON
Fr ench Significant Pictur es
CINQUIEME EL EMENT (LE
DINER D EC ON S (LE)
COUL OIRS DU TEMPS (L E
Le Cinquième élément
FABUL EUX DESTIN D'A ME
VERITES I JE MENS (LA
VERITES I JE MENS 2 (
Astérix et Obélix 2
TAXI
Performance / Profitability
Taxi2
TAXI 2
PACTE DES L OU PS (L E)
PL ACARD (LE)
Amélie Poulain
PARI (LE)
JEA NNE D'AR C
Le Pacte des Loups
Vérité si je mens
GOU T D ES AUTRES (LE)
Le Placard
ON CONNA IT LA CHANS ON
RIVIERES P OU PRES (LES
MARIUS ET JEANNETTE
BELPH EGOR, L EFANTOME
Tanguy
WAS ABI
Belphegor
ROMAN DE L UL U (LE)
FEL IX ET LOL A
Felix et Lola
Le Roman de Lulu
Communication In ve stments
Wasabi
ABSOL UMEN T FABU LEUX
BAIS ER MORTEL D U DRA G
CHAMBR ED ES OFFICIERS
CHAOS
ENFAN TS DU MARA IS (L E
TANGUY
VIDOCQ
YAMAKA SI, L ES 7 S AMOU
On this graph, we only represent pictures having significant characteristics in terms of
performance-profitability and\or in communication investments. There are around thirty
movies that is to say 4,3 % of the 690 studied movies. On the mapping, the other movies are
13
not represented because of their central position on the graph. This position does not allow
to distinguish them on both found axes: their characteristics are too averaged. Among the
selected pictures, the best "performance" returns to the movie "Le Cinquième Élément " which
obtains a record of profitability for the weakest communication investment among the 29
selected movies. In comparison, Wasabi has an inferior performance towards the assigned
budgets of communication: it is the worst ratio performance / communication on the 690
studied movies.
The second stage of this quantitative study consists in estimating the effects of the
communication investments on the movies performance-profitability. A multiple regression is
done for this purpose.
The results of the multiple regression:
The budget of communication strongly influences receipts
The objective is to measure the influence of the communication budgets on the receipts of the
studied movies. The general idea is to estimate the contribution of communication as an
explanatory variable of receipts. This contribution will be calculated for each budget: posters,
radio, press… so as to know in details the respective influences of each of these budgetary
item.
Figure 5: The tested models by multiple regressions
Total Promotional
Budget
Explanatory
(Independent)
Variable
Picture Receipts
Dependent
variable
Poster
Press
Radio
Picture receipts
Cinema
TV
Here are the tested models:
Global level:
Receipts = a1 Total Promotional Budget
Detailed level:
Receipts = a1 Posters + a2 Press + a3 Cinema + a4 TV + a5 Radio
If we keep the "Total Promotional Budget" variable, the model restores around 29 % of the
information (R² = 0.289). This result is to be discussed: it shows that it is necessary to put in
perspective the influence of communication on the movies receipts. Approximately 70 %
come from other factors. Fortunately, other appropriate movie elements (scenario, actors
14
acting…) should be taken into account but they are difficult to quantify. The obtained
equation is the following one:
Receipts = 0.538 x Total Promotional Budget
The budgets of Posters and Press are the most important
If we work on the detailed budgets, we obtain:
Receipts = 0,051 x Radio + 0,324 x Posters + 0,264 x Press + 0,009 x Cinema
The model always restores around 30 % of the information (R² = 0.296). This result shows
how efficient are the budgets of Posters and Press on receipts. We should add that these two
items (Posters and Press) present the strongest budgets in the table of initial data what
explains their strong contribution to receipts. The TV expenses were non-significant and were
eliminated.
Receipts, communication and budget of production
When we integrate into the calculation the production budget as an explanatory element of
receipts, we obtain an equation of a more complete multiple regression. The amount of
receipts is explained to 41,5 % (R² = 0.415) by these new factors. Thus we improve the
explanation of the phenomenon by adding the production budget as an extra variable. The
results are the following ones (knowing that Radio, Cinema and TV variables are nonsignificant for the model and were removed from the equation):
Receipts = 0,366 x Production Budget + 0,217 Posters + 0,215 Press
This result explains the inflationary tendency observed in the marketing of the cinema.
Inflation of the production budgets, inflation of the communication budget and inflation of the
movies copies are justified by their contribution to the movie financial performance. All the
statistical calculations are leading towards this main conclusion.
15
In the statistical plan, this study shows in what extend the increase of the expenses (in
production, copies and communication) produces the expected effects that is to say a massive
audience and a rate of acceptable profitability (25 % is the estimated threshold from which it
is considered that the operation turns out correct).
Today, the exploitation in cinema does not cover any more the production budgets. The
decline of the pictures profitability for these last years (if we except the exceptional results of
year 2001) remains quite worrisome. The distributors seem to be caught up in the system
under the pretext that their movies would be unnoticed. That’s why we notice this inflationary
tendency in the marketing of cinema.
But beyond this, we also try to put in evidence the logic which underlies this evolution.
Televisions and video also contribute to this inflationary tendency. Can the distributor assume
only more and more heavy costs relative to the new movies?
We hope that our study may support the current questioning such as the contribution of
channels, video publishers and DVD to the expenses of launching a movie.
We also keep in mind the phenomenon of greater concentration which characterizes the sector
of the film distribution today: the first 10 companies add up 88,6 % of receipts while there are
approximately 160 active and officially authorized companies of distribution and 435 holders
of professional license… The increasing power of Vivendi Universal through its three
distribution networks (Bac Distribution, M ars Distribution, and Bac M ajestic), with a
coverage of about half of the weekly offer, certain weeks, exceed the marketing field.
Faced to the increasing costs which squeeze the distributors, our role is to remind that
marketing as a strategic and operational tool, goes beyond a strictly quantitative approach.
The reproduction of copies and space buying is not inevitably the best or the only marketing
strategy.
In this study, more than 40 % of the receipts are explained by the production bu dget and
the communication budget but obviously, the "beau role" (approximately 60 %) always
returns to less quantifiable factors, probably more artistic. As in any field of management of
the cultural activities, the cinematographic art does not escape the delicate alchemy between
art and financial considerations.
16
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